Deep Blue Sea Scenario in Play for Gold BugsGold prices are currently hovering around the $1815/ounce price level amid the Thanksgiving holiday currently observed at the world’s largest economy, which is partly responsible for the prevailing low volatility in the precious metal.
Sequel to the recent price action presently playing out, gold traders were kept in the dark on Wednesday, as gold prices went back-and-forth trading in the range of $1,801 to $1,818/ounce on market sentiments that showed conflicting signals.
The mixed signals, confusing traders include the continual decline in the U.S dollar value and negative U.S Treasury yields have kept gold traders second-guessing and literally clueless on the next steps to take.
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Looking through the U.S dollar index recent price action, metal experts would expect gold prices naturally to be trading at least above $1850/ounce on the bias showing the US Dollar Index value approached the yearly low set on September 1 (91.75).
The negative correlation that usually play out between gold and the U.S dollar index was suspended arbitrarily amid macros hinting on effective COVID-19 vaccines, coupled with reduced geopolitical tension emanating from the United States.
That said, the transition from disinflationary to inflationary support for the precious metal wouldn’t come immediate meaning gold prices could remain exposed to more profit-taking, taking into account the significant amount of cash outflows by institutional investors prevailing at the precious metal market.
Gold bugs are presently fighting back for control, as the yellow metal looks poised to rebound above the $1815/ounce price level.
Still, it fair to say recent bearish patterns prevail at the precious metal, when taking into consideration gold bugs are battling hard to defend the key support level of $1800/ounce coupled with the dampened resolve reclaiming the $1825/1830 price band, it fair to say gold bugs have a lot to fight for in staying on course.